Refinancing? Don’t forget to re-file your Homestead.

Published January 25, 2010 by The Lubbers Law Group Attorneys at Law

Today, many homeowners are seeking to refinance their homes. If you are refinancing, or have refinanced, your home note, there is likely a provision within your refinance documents (your new mortgage) that vacates your existing homestead. Filing a new Declaration of Homestead is critical to help protect your home from creditors’ claims.

Have you heard the term “Homestead” but never really looked into what it means or how it can help you? If not, now is the time.

What is a Declaration of Homestead? – A Declaration of Homestead (“Homestead”) is a filing with the County Recorder’s Office that must be signed by the homeowner and notarized. The Homestead states that the signor must reside in the home and that no prior Homesteads have been filed by you for the property.
How does a Homestead Declaration protect me? – Once filed, a Homestead Declaration protects your home up to $550,000 from general creditor’s claims. This would include unpaid medical bills, bankruptcy, charge card debts, business/personal loans and accidents. However, it does not protect from claims involving a seizure or forced sale of your home from general creditors if your equity in the property exceeds the statutory maximum, which is currently $550,000. For example, if the value of your home is $500,000 and you have a first mortgage of $300,000, plus a second mortgage of $50,000, the equity is $150,000.
What if I don’t know if I have a Homestead Filed? – If you are unsure whether you have a Homestead filed, you can consult an attorney, search your property records at Recorder’s Web site, or call the Recorder’s office and ask them to search for you.
What if I’ve recently refinanced my home? – A refinance voids a Homestead filing. Therefore, if you are in the great majority of those who have recently refinanced, you need to be particularly aware of whether your Homestead is still valid. If it is no longer recorded against your property, you will need to re-file.

If you need assistance with Homesteads or have questions regarding them, contact one of our attorneys at bborg@lubberslaw.com or 702-257-7575 for a free consultation.